What isn't clear is whether the SEC's prohibition against client testimonials would apply in a situation where a client becomes a LinkedIn user and subsequently writes a recommendation for his advisor who's also a user. A few of Vasavda's clients have left him recommendations and, he says, "Now I'm getting client referrals from strangers because they read my clients' recommendations."
Expert Advice
Eddie Kramer, a financial advisor with Abacus Planning Group in Columbia, S.C., uses both Plaxo and LinkedIn-the former to stay in touch with friends, and the latter to find answers. "LinkedIn is where I go to get answers to many of life's questions, from landscaping to petroleum engineering."
Introductions
Adds Christian Farber, a senior sales executive with Albridge and a former Advent employee, "At one time, I thought LinkedIn might be a place where I'd want to work, and its CEO, Dan Nye, is a prior Advent employee, like me. However, Dan's LinkedIn profile says, 'If I don't know you, then don't reach out to me for connections,' because he has a big name and everyone wants to connect with him. So I reached out to a friend already connected to Nye and asked for an introduction."
The friend sent Nye an e-mail extolling Farber's virtues and, a day or two later, Farber received an e-mail from Nye saying, "Hey Chris, let me point you to a couple of other people here who came over from Advent," and he also said "I appreciated your e-mail," "which I interpreted as meaning, 'Thanks for following LinkedIn's rules for communicating,'" says Farber. "I thought it was pretty cool that a guy who knows Bill Gates would point me in the right direction. It underscores the power of LinkedIn as a tool."
Recruiting And Job Hunting
Penny Miller, a former outplacement consultant, says LinkedIn is one of the most valuable tools she's seen for connecting with people at target companies. "At one time, I wanted to send my resume to CB Richard Ellis [a real estate company] regarding a position. I searched LinkedIn and, through a first-degree connection [think "six degrees of separation"] was able to connect to a first-degree connection of a current CBRE employee. He said he'd be happy to share nonconfidential information about CBRE's company culture and hiring practices. We made an appointment to chat over the phone and he was gracious enough to spend about 30 minutes with me. When you do this, you get good information and if you make a good connection, the person sometimes is willing and able to pass your resume along to a hiring manager."
Says Elissa Crowther, director of marketing for Litman/Gregory Asset Management LLC in Orinda, Calif., "My husband actually found his current job through LinkedIn, and I love it for connecting with old Schwab colleagues and folks I worked with internationally."
People Research
Stuart Tarmy, formerly with Albridge and presently vice president of sales for GainsKeeper, a firm developing portfolio accounting systems for broker-dealers, uses LinkedIn extensively in his sales capacity. "I first started using LinkedIn around three to four years ago," says Tarmy, "and have my browser open to it almost daily." Tarmy uses it to research the companies and people he'll be meeting with when he visits a broker-dealer client, and to search for people he doesn't know but wants to meet. Also, he says, "LinkedIn is a great way to find candidates for a job position; my company hasn't actually posted positions there, but we're thinking about it."
Syncing With Outlook
David Lawrence, a practice efficiency consultant and head of David Lawrence and Associates in Tampa, Fla., says, "I set up Plaxo years ago as a way to create a network of people whom I'd be able to maintain contact with effortlessly. Plaxo places a toolbar in Outlook with the ability to update information, eliminate duplicate entries, create and print business cards, invite friends into the network, edit my profile and even send eCards directly. One of the real values of this type of service is the ability to mass update everyone you know."
Lawrence also suggests you upload your photo to your page, as it helps avoid confusion over common names. "It's sad to say, but there is more than one David Lawrence in this world," he notes.
Networking's Importance To Financial Advisors
The critical question, after playing with Plaxo and LinkedIn and seeing what they have to offer, is: "Will these be essential business tools in the future, or are they just a passing fad?"
Kevin Condon, Ph.D., CFP, long-time advisor and, more recently an executive vice president for advisor services for Myfinancialadvice Inc. of Boulder, Colo., says, "Our profession has been remiss in how we've developed in that there are lots of things we could have done, and should have done, to network our profession better. If planning survives and grows as a profession, I believe it will have a basic designation with sub-specialties, and networking will be important because advisors will need to call in experts for clients with specialized needs."
Now, advisors find specialized expertise either through on-the-job training which the client pays for, or by going on NAPFA and FPA forums to ask questions. The problem with forums, says Condon, is advisors, who aren't necessarily experts, sling casual advice about complicated topics.
Will business-networking sites be the basis for the networking that Condon sees as so critical? Only if we make it so. John Comer, owner of Comer Consulting LLC in Plymouth, Minn., with 160 LinkedIn contacts, says, "I have come to believe that LinkedIn works the same as all networking-you have to do the work, but if you do, you will see the benefit."